Can Garuda’s IPO Finally Take Off?

Indonesian carrier PT Garuda Indonesia has waited over a decade to go public, but has its window of opportunity passed?

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The Garuda is a mythical bird in Hinduism and Indonesia’s national symbol

The state-owned airline, which aims to raise US$500 million in an IPO, began pre-marketing on Tuesday. Sources close to the deal say the company will be in Singapore on Thursday and Friday this week, and Hong Kong next Monday and Tuesday for its roadshow.

Following Monday’s heavy selloff, shares in Jakarta have stabilized somewhat on Tuesday as investors bargain-hunt, but foreigners are clearly spooked by the reluctance of the government to raise interest rates to clamp down on inflation.

So far, the government’s response has been less than decisive. Speaking on Monday about the stock market’s decline, Finance Minister Agus Martowardojo said that it “isn’t a sign of outflows,” and reassured investors that Indonesia’s core inflation, which excludes food prices, fell 0.03% to 4.28% in December. But foreign investors don’t seem convinced, as they’re net sellers of IDR684 billion worth of shares on Tuesday, reports Dow Jones Newswires.

Garuda may need some help from its parent to show markets that it’s got a grip on inflation, if its long-awaited IPO is to finally get off the ground.

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